New Delhi: India’s purchases of palm oil will likely jump roughly 11% this year, with a relatively faster rise in prices for competing cooking oils prompting some users to switch to tropical oil.
The nation’s imports of palm oil, as consumption of fried food generally rises during festivals, wedding seasons and long holidays, may rise to 7.3 million tons in the year ending in October, according to the average of six estimates in a Bloomberg survey of merchants. Analysts and importers.
The survey showed that overall use of edible oil has changed little at 19.3 million tons this year, with fewer incoming shipments of expensive sunflower oil and soybean oil.
Its prices have increased by 28% and 29% respectively so far during the quarter, while palm oil prices have increased by only 7%.
“We were expecting higher imports of edible oils, but with these very high prices there is some demand destruction,” said Sandeep Bajuria, CEO of Mumbai-based Sunvin Group.
Soybean oil imports are likely to decline to 2.95 million tons in 2020-2021, from 3.07 million tons a year ago, while purchases of sunflower oil may drop to 1.59 million tons, from 2.29 million tons, according to the survey.
Dorab Mystery, director of Godrej International Ltd, said at a symposium this week that India may buy 11.4 million tons of edible oils in 2020-2021.
GG Patel, managing partner at GGN Research, said some consumers are likely switching to palm oil from other oils.
In some local markets, the prices of refined sunflower oil per kilogram are Rs 55 more than processed palm oil, while refined soybean oil is about Rs 7.5 more.
Weaker imports of sunflower and soybean oil may support domestic prices of the two commodities and encourage farmers in the world’s second most populous country, which imports 70% of its edible oil, to produce more.
According to Oscar Tjakra, senior analyst at Rabobank in Singapore, “the current high edible oil price environment will lead to direct purchases.”
He said Indian edible oil buyers would likely operate with lower stocks this year, adding that total imports could be at last year’s level.